SACRAMENTO — A California Public Employees' Retirement System committee on Tuesday rejected a proposal to increase healthcare co-payments for more than one million members.
Facing solid opposition from powerful public employee unions, the CalPERS health benefits committee turned down all staff proposals to hike co-payments for visits to doctors, emergency rooms, outpatient surgical centers and hospital stays. Under one proposal, co-pays would have risen to $15 from $10 for doctor visits and to $75 from $50 for emergency room visits.
The committee said more study is needed about how to pressure providers to lower prices.
CalPERS: An article in Wednesday's Business section said the health benefits committee of the California Public Employees' Retirement System authorized a new preferred provider plan with a limited number of doctors in its network. The committee deferred action until next year on a staff recommendation to create such a plan.
The decision against increasing co-payments shows how CalPERS, the nation's largest public pension fund, is subject to far greater political and union pressures than many private sector employers that have been more aggressive in forcing workers to pay a higher proportion of rising health benefit costs.
If the decision is endorsed today by the full CalPERS board, as expected, CalPERS and state taxpayers will have to absorb double-digit hikes in premiums in 2007 for public employees' health insurance.
The decision means that CalPERS will pay at least $55 million more for healthcare coverage next year. As a result, the CalPERS committee was forced to approve rate increases of 11.6% for health maintenance organization participants and 12.9% for members who opt for preferred provider networks.
Most of the increase -- 80% in the case of state workers -- will be picked up by state and local government employers and ultimately taxpayers, based on collective bargaining agreements between state and public employee unions. The rest is paid by employees through higher payroll deductions.
In recent years, the CalPERS board has used its volume-buying clout to minimize premium increases. The pension fund has had more success controlling costs than many private sector employers, some of which have been forced to eliminate health coverage or switch to high-deductible, so-called bare-bones coverage.
"The co-pays are take-aways of benefits, a shifting of the costs from employers to members," said CalPERS board member Robert F. Carlson. "We're putting pain in their pocketbooks, besides the illnesses they already have."
